Advantages of partnership
There are several advantages of partnership business. One, Partners share any loss made unlike in sole proprietorship where the proprietor suffers loss alone. Two, the process of registering the business is not as complicated and expensive as that of forming companies. Three, capital base can be increased through contribution of partners unlike sole proprietorship. Four, Members contribute in decision making therefore a quality decision can be made. Five, members share tasks according to skills and experience unlike in sole proprietor where tasks cannot be shared. Six, a partner can get off day to relax unlike in sole proprietorship where the trader is over worked.
Disadvantages of partnership
There are several disadvantages of partnership business. First, a mistake done by one partner is suffered by all partners. Second, it takes long to make decisions because all partners must be consulted. Third, continuous disagreement among partners may lead to dissolution of the business. Fourth, lazy partners benefit unfairly from hardworking partners. Fifth, its sources of capital are not as many as those of companies because it cannot sale share to the public. Lastly, if the main partner dies or withdraws from the business the partnership may either collapse or may be dissolved.
Gage, D. (2004). The partnership charter: how to start out right with your new business partnership (or fix the one you're in). New York: Basic Books.